1. Define Fiscal Policy.(2marks)
2. With the use of examples, explain the following:

1. Budget Deficit. (3marks)

2. Budget Surplus. (3marks)

3. Balance Budget. (3marks)

C. Economic growth, Redistribution of income and correcting externalities are just three government objectives. Explain how the government can use fiscal policy to achieve these objectives. (15 marks)

D. Fiscal policy can be ineffective because of time lag. Explained with example the concept of time tag